Friday, April 16, 2010
Hopelessly wrong? Despite wearing a T-shirt proclaiming "I was hopelessly wrong on house prices – ask me how," Steve Keen didn't think he was wrong at all.
"It's a wonderful promotional opportunity," he told the Herald at the start of an epic eight-day 225 kilometre walk from Canberra's Parliament House to the top of Mount Kosciuszko wearing the T-shirt (or a fresher version of it) every step of the way.
At the start of the financial crisis the University of Western Sydney associate professor famously sold his own house and claimed prices would fall 40 per cent. Macquarie Group economist Rory Robertson promised to wearing from Canberra to Kosciuszko wearing the T-shirt if they ever did and challenged Keen to do the same if the slide was less than 20 per cent.
Rapid fire interest rate cuts and a doubling to tripling of the First Home Owners Grant kept the slide to just 5.5 per cent after which house prices turned back up to climb 15 per cent above where they were when Keen and Robertson stuck the bet.
Thursday was pay-up day... Surrounded by about 40 supporters including stilt walkers and a dog in a jumper reading "house prices are barking mad," Keen said he knew he had lost last May when Wayne Swan extended the First Home Owner's Boost.
"The day he announced it was extended by six months, that guaranteed I was going to lose. I had six months to think about what to do."
"But that just postponed things. It reignited the property bubble but it will unwind. Rory has said he'll walk if prices fall by 40 per cent in his lifetime. It's like in Crocodile Dundee; he has shown me his knife, but down the track he'll face a bigger one."
Keen plans to run 15 kilometers each morning, stop for lunch and a massage and and then walk 15 kilometres each afternoon in the company of supporters. They will stay in motels overnight. At keenwalk.com.au he is asking for sponsors to donate to a charity called Swags for the Homeless.
"This has actually garnered me support," he said. "People are saying, thank god someone is sticking it up the property industry."
On hand to wish him well was a former Australian Treasurer, John Kerin who replaced Paul Keating in the Hawke labor government.
Keen plans to reach the peak at 1.30 pm on Friday April 23. "I'm no Tony Abbott, but I have been training running half marathons."
By email from outside the country Macquarie's Rory Robertson confirmed that he would undertake the walk himself if house prices ever fell 40 per cent, and added he would also do it "if Dr Keen proved "the existence of the Loch Ness monster."
Published in today's SMH and Age
Business Spectator is filing from the walk each day
. Steve Keen is on his way
. Steve Keen to walk to Kosciuszko April 15 - 23
. Steve Keen's brilliant T-shirt design
. It's official: Rory wins